New Housing Benefit cuts: what effect will they have?

epz_2

I missed the budget but one thing that caught my interest but hasn't been discussed much is the capping of housing benefit.

as much I can gather the benefits are capped at
£250 for a one bedroom property
£290 for a two bedroom property
£340 for a three bedroom property
£400 a week for a four bedroom property


Or 30% of local median rents.


I haven't really confirmed this more than the 1st search on google but this seems like it could be pretty brutal for some low end BTL'ers.

1984ReturnsForReal_2

I suppose I will have to move out of my £104k per annum penthouse in Chelsea.....

silvercar

As an exercise,

91 2 bed properties available to rent in my town on rightmove. ranging from £1250 pcm to £750.

median property (so current LHA would be based on this) is £950 pcm

30% percentile is £875 pcm

So a drop in LHA entitlement of under 8%, though on benefits £75 extra a month may be hard to find.

ILW

1984ReturnsForReal wrote: »

I suppose I will have to move out of my £104k per annum penthouse in Chelsea.....

You could sell off a few things on Ebay to make up the difference.

Generali

It will mean a fall in demand for rented housing in the middle and top of the market as renters won't be able to bid as high as before without foregoing something else. All things being equal that should lead to a fall in rents and a fall in the number of houses to rent.

At the bottom end of the market conversely it will increase demand as people look to trade down from more expensive places. The numbers look to me more generous for 1/2 bed places than houses so perhaps it's a bailout for the '2-bed new build' in Hellhole, Lancs investors (probably not but it's good to chuck in a bit of controversy).

1984ReturnsForReal_2

ILW wrote: »

You could sell off a few things on Ebay to make up the difference.

I did consider drug dealing but GlaxoSmithKline turned me down after a psychometric test.

Apparently I am too tame for them.

IveSeenTheLight

Generali wrote: »

It will mean a fall in demand for rented housing in the middle and top of the market as renters won't be able to bid as high as before without foregoing something else. All things being equal that should lead to a fall in rents and a fall in the number of houses to rent.

At the bottom end of the market conversely it will increase demand as people look to trade down from more expensive places. The numbers look to me more generous for 1/2 bed places than houses so perhaps it's a bailout for the '2-bed new build' in Hellhole, Lancs investors (probably not but it's good to chuck in a bit of controversy).

Have you missread.
the figures are per week

£250 for a one bedroom property
£290 for a two bedroom property
£340 for a three bedroom property
£400 a week for a four bedroom property

I rent out a 2 bed property for £850 pcm, which I think is very good, but the LHA cap for a 2 bed place is £290 per week, else £15,080 per 52 weeks or £1256.66 pcm.

I'm sure this is more than enough for most places in the UK.

I'm surprised it's so high

IveSeenTheLight

IveSeenTheLight wrote: »

I'm sure this is more than enough for most places in the UK.

I'm surprised it's so high

Just checked my local VI area and notice their limits are lower

http://www.aberdeencity.gov.uk/Benefits/lha/ben_local_house_allow.asp

My properties have never been rented to those on benefits, so not really sure at this time what the impact would be.

Certainly the reduction does not impact my local area therefore theoretically nothing

Generali

IveSeenTheLight wrote: »

Have you missread.
the figures are per week

£250 for a one bedroom property
£290 for a two bedroom property
£340 for a three bedroom property
£400 a week for a four bedroom property

I rent out a 2 bed property for £850 pcm, which I think is very good, but the LHA cap for a 2 bed place is £290 per week, else £15,080 per 52 weeks or £1256.66 pcm.

I'm sure this is more than enough for most places in the UK.

I'm surprised it's so high

Aren't there 2 caps? The absolute one you list and then the 30% of median rents in the area. Perhaps I misunderstood.

We posted at the same time I think. The difference is the 30% of local median rents as clearly the rent limit in Macclesfield and Mayfair should be different.

Silverbull

There is no change on the LHA calculator yet

https://lha-direct.voa.gov.uk/Secure/Default.aspx

Im keeping my eyes on it.

chopperharris

All this means is that if you want to live in decent house you HAVE to work , good idea on one hand but just another way of opening the floodgates to corraling the great unwashed along the lines of shanty towns for the poor , ultimately if this is the long term plan then more towns where the largest part of the poulation of it is on benefits.... but perhaps that is the plan if you want to get on then you get off the dss.

Lets see if the mps vote for no wage increases up to 2015 for themselves , and limiting their allowances towards their rent in just the same manner.Well they probably will as the majority of them are rich already.

We have a cheek in the uk , the royals cost us circa 8m , now thats the biggest housing beneift and carers allowance single payment of all while sitting on massive assets and was technically paid to breed like those so often highlighted by the chip wrapper media .... pity the phil the greek never !!!!ed off back home then we could have been complaining about her maj being a single mother too.But then of course they make more money for the uk that its costs us for them , yeah right , standing looking at the changing of the gaurd for 5 mins is really the reason why foreigners come here.